The ACPR has once again cracked down on grievances relating to the AML-CFT. This time, it's the VIE subsidiary of a major French insurance group that has been fined 3.5 million euros, with a high reputational risk due to the non-anonymization of the sanction.
Systematically identifying sanctioned companies by name! Despite requests to anonymize sanctioned companies, sanctions committees remain intractable.
TheAP Solutions IO teams explain the various criticisms addressed in this sanction, and above all how simple it can be with anAugmented Intelligence tool to be 100% compliant!
Failure to update customer information
Whether in this or previous sanctions, the ACPR is extremely vigilant regarding the frequency of KYC updates, as well as the content of this KYC.
The ACPR imposes severe penalties on regulated professions that fail to meet their obligations in terms of customer knowledge, such as :
- Lack of supporting documents
- Incomplete and/or inconsistent customer profiling
- Failure to detect high-risk countries (country of residence, origin/destination of funds, etc.)
- Lack of traceability
- No or inaccessible archiving
- No filtering of banking transactions
- ...
AP Solutions IO
It is essential that all actions, decisions (whether manual or automatic), supporting documents, comments, etc. are traced and stored in your AML-CFT tool, with the possibility of making them available at any time. ACPR inspection reports prove that investigators know exactly what to ask to verify compliance with AML-CFT.
What's more, your system must be capable of integrating and analyzing any data you may transmit to it. The quality of the information transmitted is essential if the ACPR is to consider your AML-CFT system adequate.
Finally, it's important to update this knowledge with different frequencies depending on your risk mapping, but also on your customer's profiling score : the higher the overall risk, the greater the frequency of updating.
Late or non-existent detection during the business relationship
In this sanction, the ACPR criticizes :
- Late detection of Politically Exposed Persons (which, if we look in more detail, means that the time taken to process the alert is too long).
- Non-detection during the business relationship
AP Solutions IO
It is essential that your AML-CFT systemautomatically integrates, on a daily basis, at a minimum, all lists of Sanctions and Asset Freezes, but also lists of Politically Exposed Persons, their relatives(RCA) and/or Persons with a bad reputation(Adverse Media), risky countries, etc.
Secondly, your screening tool must filter your entire customer portfolio on a daily basis. This automated screening should then bring out only new alerts or alerts that have undergone a major change. For the sake of productivity, previously decided alerts that have not undergone a major change should not be resubmitted to the decision of an operator/analyst AML-CFT.
So, even if one of your customers was "unalerted" at the start of the relationship, if he becomes listed during the business relationship, the tool automatically informs you of this development.
Alert processing time too long
As we saw in the previous grievance, the ACPR keeps a close eye on the processing times for the various alerts (and not just the Sanctions/Asset freeze alerts, but also the PEP alerts...).
The ACPR reports that alerts are processed several months after they are generated, not to mention the fact that peak alerts take longer to process.
AP Solutions IO
It is essential that your filtering tool automates certain decisions to relieve KYC analysts. This requires clear initial settings. Then a workflow parameterized according to your different levels of vigilance.
It is also essential that the reasons for alerts are spelled out as clearly as possible, to avoid tedious and time-consuming searches for your KYC/Compliance analysts.
Lack of consistency in risk classification
In addition to the criteria deemed incomplete by the ACPR in the risk classification, the sanction also criticizes a lack of consistency between the "theoretical" policy and what was done in "practice".
AP Solutions IO
It is essential that a profiling tool allows dynamic parameterization, so that different data from different sources can be taken into account and cross-referenced.
It is essential that the AML-CFT tools can be configured to take precise account of all internal Compliance criteria. We note that the ACPR is adamant about any inconsistencies found between the theoretical compliance policy and the configuration of its tools AML-CFT. Moreover, this parameterization must be easily exportable, so that an auditor can be presented with an explanation of how the system works at any time.
This configuration must also enable certain decisions to be automated, in order to streamline the customer/KYC process.
This parameterization should also enable certain decisions to be automated, in order to streamline (digitized) customer and KYC processes:
- Productivity
- Security
- Coherence
Inappropriate follow-up of "at-risk" customers
The ACPR points to the fact that some customers considered as PEP were not validated/confirmed by a member of the executive body.
Distinct monitoring procedures are expected for different levels of risk. A high-risk individual should not be subject to the same KYC constraints as a low-risk individual. The ACPR has criticized this lack of distinction in the case in point.
What's more, in high-risk situations, customer acceptance must follow a decision-making process that includes decision-makers.
Information relating to the AML-CFT must then be distributed to those entitled to it (people involved in the commercial relationship, third-party applications, etc.).
AP Solutions IO
It is strongly recommended that your screening tool be interfaced directly with your Information System, in order to limit errors, delays in customer knowledge, loss of "business" productivity... and to automate all tasks. The digitalization of the customer journey is at the heart of today's concerns, and requires the integration of the compliance/financial security control stage.
It is also essential that your AML-CFT tool integrates customizable decision workflows and notification systems.
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